How do I determine the right amount of insurance for my home?

Market Value is the price at which you can sell your house in its present condition. The market value does not establish the amount of insurance required.

The standard fire insurance in the market is based on Sound Value which is the replacement cost less depreciation.

Replacement Cost is the cost to rebuild your home using comparable materials and quality based on current market estimates. The replacement cost of your property is the best way to establish adequate amount of insurance required.

When purchasing your homeowner's policy, it is better to use replacement cost as basis for the insurance coverage because it compensates you for the actual cost of replacing your home in case of loss.